Succession planning: What is the cost of doing it poorly…or not at all?

For companies in the energy industry, an in-depth, corporate-wide succession planning program is especially important. Today’s oil and gas business has unique characteristics that make it critical for smart companies to invest in a coordinated, holistic employee development effort.

Because of the highly specialized and technical nature of the industry, most energy companies have a handful of non-executive employees going five or six layers deep in the organization who have a significant impact on company results due to their technical knowledge and experience related to the company’s core mission in areas like geosciences, offshore and international operations, reservoir engineering/completions or project management. Finding and recruiting equivalent talent from outside the company is difficult as the industry lacks workers in the industry with similar expertise.

In addition, many energy companies still haven’t solved the well-publicized “talent gap” issue, caused by the industry downturn in the 1980s when many young employees were laid off and left the business and new hires were non-existent. There is still a considerable demographic disparity at many firms, with a scarcity of employees who could be considered “bench talent” with the experience to step in as leaders over the next few years.